tv Key Capitol Hill Hearings CSPAN November 1, 2013 8:00pm-10:01pm EDT
the court hate oral argument on the case in september. this is 40 minutes. >> good morning your honors. i am francis manion representing the appellate in this case. the central christian in this case should be whether the government has shown a compelling interest in forcing this particular family business to include contraception in its health plans against the family's religious beliefs at the same time the government has decided not to impose that same requirements on millions of other employers for both religious and nonreligious region -- reasons. the district court never reach this question because contrary to supreme court's teaching in the case it focused on the formal identity of the parties instead of on the law that we say and that the government acknowledges implicates religious liberty interests. the district court did answer these two questions first whether or not gilardi is
substantially burdened by the hhs this -- hhs mandate and the court encrypt they said no. the court incorrectly said no. had the court answered either of these crackly nephew it would have received a strict scrutiny test which should've been easy given the massive holes in the scope of the coverage written to this mandate and the ready availability of less restrictive means of achieving the government schools. as we see this case there are four tabs or roots to get to strict scrutiny. the first one is to look at the gilardi's as individuals and whether or not there's a burden on them. the second is the companies as persons exercising religion. the third is what some courts have referred to as they pass through standing whereby a closely held family type corporations such as this one can assert the free exercise rights of its owners and forth
is a roots that only judge walton in the district here used which is the third-party standing doctrine. i would like to begin by looking at the claims of the gilardi's as individuals. several things are undisputed. the gilardi's control and make the decisions for the companies including what goes in and what's kept out of the company health plans. third the gilardi have a well-documented religious or four of the hhs mandate challenge here today requires the companies to include those things and their plans for face significant lines. and five those things should only be included in the plan if francis philip gilardi direct them to be included. given those undisputed facts
it's our view that the court should have applied the test of the thomas case and asked whether the hhs mandate put substantial pressure on the gilardi's to modify their long-standing behavior and violate their religious police. the responses of course it does. they either abandon their religious belief that they can't have their company pay for these things or go out with business. they lose their families livelihoods and while the compulsion may be in direct s., says upon free exercise is the less substantial. speak in my asked just a process question to begin? if we conclude that the gilardi's as individuals what is the limiting principle because they are a corporation and their shareholders of this corporation so does that mean if you are a shareholder you could likewise assume free exercise of your
right? >> it think the limiting principle is control of the decisions made by the corporate entity so it's the ceo. >> not unless the ceo which i wouldn't think would be the case can make decisions for the corporations that are not ratified by the board of directors. in other words the principle is shipping control. a. [inaudible] >> i would think so. >> the same. >> yes. >> the discussion of that in the austin case the supreme court austin case which was the cave that citizens united overruled justice scalia goes into that whole principle and of course that's under the concept of free
speech that essentially says it's not that difficult to determine who makes decisions ultimately were corporation and whatever that process is, the board of directors or some other set up that is what controls. >> in the cases in which petitioners can file the third circuit is there any issue that is not contained within the question? >> i don't think so. >> taking the two cases together , yeah. in the common law case they didn't reach at least the majority did not reach. that's simply about corporate free exercise but in the third circuit case both issues are discussed. >> if we decide that the gilardis could bring this suit as individuals but we don't
think the corporations have the free exercise right what happens to the injection? how does that work? >> is currently in place. >> in other words and injunction would be issued by the district court. how would that work? >> that's an interesting question your honor. you would have decided the gilardis could bring a case as individuals and presumably the strict scrutiny that the government has not carried its burden. the injunction would be against the government enforcing the mandate. it would make sense if it's not also applicable to corporations obviously. >> there's a soul procedure that covers that talks about injunctions being binding not only on the individual but in favor of this case the gilardis but also entities and people --
[inaudible] >> focusing on the gilardis as individuals the government's response is the gilardis aren't forced to do anything. because they have chosen to operate under the corporate form there is no burden on them at the corporate veil is not an iron curtain. there are exceptions particularly in the area of first amendment rights. the court of citizens united specifically listed the kinds of special advantages the corporations enjoy the specifically limited liability. the supreme court said there that the state cannot exact the price of these corporative first amendment rights. >> substantial burden is that the mandate requires my clients to do something that their religion tells them they cannot do. >> which of course we know is
permissible in our constitutional scheme when that happens. you are merely saying it that way does not answer the question. there are lots of cases in which -- i mean and no one seems to it tends to look at that carefully and i looked at all the other cases and those on your side of the issue skimmed past it. i don't know how you get past the united states versus leave. you cited the proposition that is uninteresting to me for the question that i would pose. the court was very clear they are in saying every person cannot be shielded from all the burdens incident to the exercise and every aspect of the right to practice religious beliefs. and on and on it does goes so a very strong statement. there was no question the court said it was absolutely a burden on religious free exercise. those who opposed the social security system the court didn't
doubt it for a minute that they said we are commercial operations and you decide to come into the market. there are some things that you have to adhere to for the better good because there's a larger interests and there are many cases like that. the title vii handicapped there are many cases the court is routinely held that you can't prevail. >> the passage referring to lee is a strict scrutiny analysis. we are not saying that there is an absolute right. speeds for this case taken all the way down the line i don't know how you get past lee. i don't see how the government doesn't prevail. i don't see what's different about this case or you have five national mandate and you have a requirement is lots of employers have to follow. your employer is not obliged to do anything other than contribute to the program. gorton player is not obliged to
give contraceptives to anyone or to endorse abortion. your contract can do what is required and put up signs that say i strongly oppose abortion or strongly oppose contraception. whatever they want. there's a burden but it's not acknowledged and lee has never been overturned. >> we are quite comfortable that are case fits within lee. >> i don't think you are and i'm trying to figure out why. speedily court found there was a burden on mr. lee's religious beliefs. that is where the strict scrutiny comes in and we get strict scrutiny there's no way the government can justify it because when you talk about the national scheme that is not we have here. according to some chords calculations 191 exemptions from this mandate. >> i think what i'm hearing you
say is you can't prevail under lee as is but for your assertion that this is fundamentally a discriminatory system. >> yes and i think that's the analysis that the supreme court has to follow. but the supreme court says his government has to justify the application of its mandate or law to the particular claimant and in no center of the government granted exemptions for hundreds of thousands of data but was unwilling to make exemption for the hundred and 30 so legislators in that case. here it's far worse than that. in the federal register we have 90 million and some courts have calculated 190 million exemptions from religious and nonreligious reasons. there's no way that this is comparable to leave. >> your corporation a commercial operation does not purport to be
a religious operation with those companies that are exempt under those terms. >> those are the only companies that are exempt. >> they are small companies that are grandfathered. >> the government says it is a right and you can maintain it indefinitely. >> lets assume it's limited in the statute. it's a pass-through period and in a certain. makkah goes away. where is this vast sea of exemptions that are relevant? >> well -- >> you certainly can't equate yourself with religious corporations. this is not a religious corporation. in my view just so you understand what i'm thinking the grandfathering group is an insignificant group and you can't equate yourself frankly with the non-profits can you?
it's a commercial operation. so we are not talking about a large group. >> candidly i would disagree with your honor. it is a large group. >> again i don't see anything with lee. you said there's a vast sea of exemptions. i don't see any vast sea of exemptions. i see some exemptions clearly explained in terms we haven't understand in terms of case law. >> i disagree with your assessment of the grandfathering exemptions. the regulation itself says it's a right and indefinite. >> it hinges on how we construe the grandfathering. >> not necessarily because the other exemptions would have to be taken into account as well. >> did i miss some? >> no that that's the point. they are insignificant. >> they are not religious corporations, you can't argue that. >> that is why we are here. we don't qualify. we are saying that rfra requires
to begin an exemption because of those other exemptions. what we do say is the exercise of religion is not necessarily limited to people in the quote unquote religion business any more than in that the latte case. the did the approach that the supreme court is limited to corporations and the speech business so i frankly disagree with your honor's assessment of the scope of the exemptions. they are massive. >> i don't believe you cited the case that supports the proposition in favor of the supreme court case. >> not familiar with that your honor. >> it's not religion or speech and justice stephenson in his opinion dealing with this says there's a flaw in the governance case.
the operation of the statute is so pierced by exemptions and inconsistencies that the government cannot exonerate it and it's an advertising. the supreme court struck it down. the district court never got that. >> that's correct. >> the threshold question here is identifying whose religious beliefs are being burdened. the next question is -- i just want you to answer the question -- i can't remember the procedural posture of this case. [inaudible] >> notated not. >> is the case comes to us we have allegations of your clients that run their company in the manner that the mandate requires and violates their religious beliefs. that is uncontested.
>> that is uncontested. >> the question then becomes what is the relevance of the corporate structure? unless there is another religious -- that says if your company is a corporation that you have absolutely no moral obligation to to run it in a manner consistent with the catholic teachings. >> our clients interpret their catholic faith the opposite way that they are required to run it in a manner consistent with their religious faith and that is what they have done as long as i can find records for. >> is there any significance to the fact that they would be subject to part of the internal revenue code and under the internal revenue code at least for income tax purposes the court would disregard it because this is a -- [inaudible] >> it may well be and it's an s corp. even though there's this corporate form the next result
of the penalties goes on frank and phil gilardi separate income tax returns on a schedule came out. exactly. >> that's true for limited liability party. >> i think when we are dealing with a law that impinges upon fundamental first amendment freedoms the supreme court has taught we don't allow for him to triumph over substance and that is what we are arguing here. >> is that what lee says? if you are in the commercial market you have to give up some for the greater good. >> it does say that but what we say is that's part of the strict scrutiny. >> congress has some exemptions as well. >> that is your case. you are saying the exemptions are so overwhelming, so large in their number because you can't possibly get around lead. lee had exemptions in the court
gave at the back of the hand. they said of course congress can make those decisions. that is what we do. you cannot come in they say and impose your religious values on society and denied to your employees who are larger than you are what congress has decided is the better good and they should be entitled to it. that is the way that lee looks at it. you can't bring your religious free exercise and overtake the larger good of society. >> employees are certainly free to buy and use contraceptives anytime they like. the gilardis are simply saying -- >> how is it different than paying them wages? >> detzel line they draw in the thomas case. the court may not second-guess. the line has to do with principles of moral theology
about cooperation with evil. >> i don't get what the plaintiffs -- has to do other than contribute to a national scheme. they are not in anyway applies to give up their beliefs. >> they have to literally check off and join dependence. contraceptive sterilization and abortion is not the same as a national scheme for social security or income taxes. it's quite different. >> are these employers applies to take the contraceptive benefits? >> under the hhs mandate they will be. >> they are obliged blacks. >> right. i see that my time has expired. thank you your honors.
>> may it please the court. the -- for the federal government. if i may begin with the threshold points that the sixth circuit recently made which is the claims they are and hearing all of these contraceptive coverage cases are asking the court to interpret rfra in a way that would disregard the corporate and the supreme court etc.. kashmir has made clear that the principle tenet that a shareholder is distinct from the corporation holds true and it has interpreted the federal rico statute in accordance with that back on common law principle. there are other examples that we have cited in our search petition. this is not a contested proposition so the question we have here is it a statutory interpretation and what to rfra do if the congress enacted in
1993? >> it defines persons as corporations. >> unless the context indicates otherwise in the language of rfra is persons exercise of religion so when you say the claim is by regulating the fresh way foods corp. and that would be any form of regulation that is tantamount to personally burdening frank and philip gilardi as individuals and we are not aware of any support in the 200 years before it was enacted. >> but that's a religious question. >> this is a statutory question. >> whether regulating fresh way as you say burdens the gilardis exercised in the tenets of the catholic church doesn't depend on the statute which is they say it does. they say it verdon's and that
allegation is so outstanding that government hasn't contested it. will you contest that? will you say the catholic church or the catholic religion does not recognize the burden of the gilardis from running their companies solely on the company in that way? >> i'm distinguishing distinguishing between this and stared at the time and the legal question. we are not asking the question. >> is their basic argument that to run the company and the way that the government is requiring us to do through funds violates our religious beliefs? that's at the heart of the decision. do you contest better do you not? >> we have not contested the sincerity of the claim. at this point we have no reason to. >> so you accept that? >> as a matter for all we are saying that does not state a
prima facie case under rfra and it would be wrong to interpret rfra to about -- i'm not sure where the line is the controlling shareholder officer whatever the client is to say we regulate a corporation is the for-profit businesses the corporation that you then reverse and say this is for legal purposes a substantial burden on the individual who owns the company and is the ceo. >> to follow up on that if the gilardis had established their business as a partnership i assume you would then agree that they have standing? >> yes. all of our other arguments would be the same and would not acknowledge that particular burden of which they claim is substantial. we argue that scrutiny -- >> they clearly had standing individuals and your argument would be that the mandate does
not impose a substantial burden on them? >> that's correct. their number of independent arguments but the threshold problem with the claims here and hobby lobby and most of these are s corp. says the same point which is that you do not interpret rfra or other federal statutes in a way that disregards the background visible that the supreme court reiterated that has been said many times, a corporation is distinct from its shareholders ceo president. >> that's not under the internal revenue code code though is that? >> there's a specific provision in the tax code that gives a tax benefit to certain corporations. s corporations that have fewer than 100 shareholders and that avoids double taxation. >> under subchapter s this fresh ways only has one shareholder, right? >> these corporations have two.
>> they are only treated as one. >> correct. i believe that's right. many of these pending cases it's the share -- sole shareholder. they have several but there are cases that have the sole shareholder and are exactly the same. >> your view then that the corporate form itself has this effect, doesn't that mean then that the state which allows them to incorporate is actually imposing an unconstitutional condition and basically saying if you get these benefits you have to give up certain constitutional rights to do it. >> first there is no constitutional claim before the court.
there is no viable free exercise. the only question before this board is the statutory one and 4200 years no corporation or sole shareholder has ever obtained an exemption from any form of regulation on the theory that is being urged here which is that the pass-through the corporation treat corporate regulation as if it were regulation of the ceo or the controlling shareholder. there is no support in any supreme court case. the plaintiffs here and elsewhere for life on ninth circuit decision called townley in which the ninth circuit went on to reject the free exercise claims that essentially there's a difference between a closely held corporation and its controlling shareholders but it did not address any of the supposed that are crucial here and the third circuit and the sixth circuit exclusively rejected the townley pass-through theory.
and if i can make sure to address this strict scrutiny point. >> let's suppose we have a religion and one of the beliefs in the sacred text was that if you own and run a company and your company, corp. violates your moral principles you are just as guilty of a sin as if you did it yourself. say that's the religious principle. would your argument still be that the corporate form trumps the religion, the religious precepts? >> yes as a matter of law under rfra. we are taking as a given that your hypothetical is their belief that they sincerely believe that their teachings of the catholic church prevent them from i don't know acting as officers of the corporation that
complies with the federal law and that compliance -- we are not taking out the sincerity. we are taking as a matter of law at congress in an act of rfra -- [inaudible] >> how did you get to that proposition? just to treat persons not as a corporation but individual how do you get to the proposition that recognize this precept? >> a few different points. first we have hobby lobby, 200 years between the adoption of the first amendment and rfra which is meant to restore the supreme court's rfra jurisprudence. there has never been a claim like that.
>> if there's never been a claim like that -- >> you are asking what was congress doing when it enacted rfra and you have to say it's restoring something. i conclude for the first time it's authorizing courts to disregard the corporate forum and look past the regulation of the general business corp. and treated as if this were a burden on the individual's who are officers of the company. >> i think the court should recognize that the over rulings -- >> i know it said so when restores jurisprudence. >> any exercise. >> i mean the court has been very clear. when you are looking to the body of president you look to the pre-smith jurisprudence and conspicuously what you have our are claims by natural persons like sherbet and yoder which are
the two cases cited in rfra and some claims by churches which is not surprising. these are organizations formed in order to exercise religion. in all of rfra's supreme court precedent nothing in the debates nothing in the legislative history that the court is inclined to look at. a lot of background federal employment law federal employment statutes in which there are specific exemptions for certain types of employers that those have been confined to essentially churches, religious institutions. >> let me ask you in that regard is it limited to nonprofit corporations? >> are argument of understand the question that a for-profit corporation -- yes if that's the question our argument here and we have different arguments and their pending cases in district court brought by a nonprofit religious institutions that are
challenging the new rules issued in july. i'm flagging those at the cases in the courts are petitions, it is sufficient that we are talking about for-profit corporations. >> that is your way of distinguishing the corporate -- >> the supreme court has said that congress good in title vii exempts not just the church's religious sect 70's but it could go all the way to the church's nonprofit activities. it was the mormon church that ran a nonprofit gymnasium and the reasoning was it was devoid of entitlement concerns. for church a church to have to predict in advance whether a court would regard its soup kitchen or other activities as religious or secular is itself automatic so congress couldn't go beyond the core exemption and get to the mormon church running a nonprofit gymnasium.
but there is nothing that would take the step to the war profit business because it has directors and officers and shareholders. >> is a 501(c)(3) corporation corporation? >> i just want to be careful not to step into issues that may be the subject of litigation in the district court that nonprofit religious institutions -- [inaudible] >> i don't believe that is part of the definition but there are piggybacks of other established -- >> the district court's opinions of dave 501(c) stats which raises a question in my mind, if you have a distinction indeed may deny this but if you're distinction rests on the treatment of a particular section of a 501(c) then why
isn't an s corporation exempt -- not exempt the wide is the shareholders of the s corporation -- >> again this court's president interpreting the title vii exemptions and the university of great falls cases interpreting the nl are a exception but on title vii principles. talks about nonprofit but i don't understand this court to say that s is tantamount to 501(c)(3). essentially if you look at the employment law statutes it gives which congress enacted rfra there is precedent to exempt not just the church but the church's nonprofit activities whether or not they hard court might regard those activities as religious or secular. is this court claimed in the great falls case it's hard to decide whether church's activities are secular but there's a bright line easy way
to distinguish between nonprofit activities and for-profit activities. >> i want to make sure i understand the governments argument here. are you saying that the government takes the position that for religiously observant owners of corporations there is no free exercise right, or are you saying in fact that if it's a neutral and generally applicable law no one has free exercise? >> we are saying as a matter of interpretation of rfra there is no substantial burden on the controlling shareholder officer based on general applicable regulation. >> the reason there's no substantial burden in your view is because it's the corporation that has to implement the
mandate? >> it's the corporation that has all of the obligations. it's not the personal responsibility of mr. gilardi. >> regardless of religious tenants, does it matter in a religious sense that you can't excuse yourself from a the violation of the moral code by claiming it's the corporation but that doesn't matter to the government treats the we are we are not asking the court to question that. i'm sorry. >> even if they brought this suit as individuals there still would not be substantial burden. >> there are plaintiffs in this case and we thinks the sixth circuit there is neither standing for this substantive and supple. just trying to understand. you said just a moment ago that because it is a corporation that
has all the word if implementation there's no substantial burden on the gilardis but you also said even if they brought it as individuals you would argue -- you would make all the same arguments that there's an assist and sheberghan? >> that's exactly right. >> on the one hand it's because the corporation is doing all the implementation but you are arguing that even if they brought it as individuals they would be no burden? that's what i'm trying to understand. >> if the question is forget about the corporaticorporati on in this were just a sole proprietor the argument would still be that there is no violation of the reasons would be different. you would then be dropping down to our other arguments that this particular burden is too attenuated and strict scrutiny is satisfied and to make sure i respond to the grandfathering argument. from my recollection of the survey to the extent district
courts with the tenth circuit have ruled against us at spin on the basis really of the grandfathering provision and we just think that's a fundamental misunderstanding of the grandfathering provision. >> they claim the regulations go on indefinitely. >> we are saying the same thing in different ways. if you raise co-payments race to dockable's and decrease employer contributions and materially reduce benefits all the things that claimants do all the time it's a grandfather status. sometimes the term grandfather means you are forever protected and this is not a sense that the affordable care act is using grandfathering. if there are no further questions, thank you. >> thank you year honors. what the argument comes down his heads the government lands tails
the claimant always loses biggest presents a situation where the supreme court -- so if you have a kosher deli owner who goes into business and decide i'm going to incorporate and allows pass requiring all establishments to sell pork or some violation of kosher regulations. no one could bring a rfra claim. if you have a sabbath observer who for sound business reasons decides to incorporate to encourage economic growth requires all businesses having more than two employees to be open seven days a week, no one could bring a rfra challenge there. >> again the supreme court has addressed this. to maintain a society that guarantees religious freedom to a great variety of faith require some religious practices yield to the common good. the cases go on and on.
we can't have equal just announced i firmly and absolutely believe in x and x happens to be inconsistent with the case. i believe it strongly and it comes from whoever the great leader is in this particular moment and no one doubts it at that notion is not a viable notion. that's not the way we run it. rfra was enacted to overturned. >> did not overturn lee. the principles and lee have been recited by the supreme court over and over again. they are viable principles that sometimes free exercise has to give way to the common good depending upon whether the government is shown there is a way. >> a restrictive means which there's turned me as and in this case i see my time has expired.
we defend this nation and take the beating then it is to give up a program that would result in this nation being attacked. we would rather be here in front of you today telling you why we have defended these rogue grams then having given -- and have our nation or our allies be attacked and people killed.
a security and legal annals met in washington for the american bar association's national security conference. this panel discuss organized crime and the funding of terrorist organizations. this is just under two hours. [inaudible conversations] [inaudible conversations] >> good morning. i would like to call to order the 23rd annual review of the field of the national security law. my name is harvard for the standing committee on law and national security and i did that with jim mcpherson has the chair the committee. i want to get a few
administrative issues out of the way. the first is for everyone in the room c-span is here so when you ask your questions we appreciate it if you would identify who you are and speak clearly in a short crisp question for the panel. i have a number of other administrative announcements. the first is cle for continuing legal education. we would like you to make sure you fill out the forms and give them to holly. you will also notice we have the scale of sheets that are on your table. they are reviews. we use them -- we review them very carefully afterwards. that is why we think our programs have improved over the years because we listen to what you have to say and try to give you the type of programs you really are interested in. we would also have another announcement. our committee will be having on friday november 15 an address addressed by ambassador marc grossman. he is the vice-chairman of the
cohen group. he will be speaking about the diplomatic campaign in afghanistan and pakistan. he will be at the university club at 8:00 a.m. on november 15 so please take out your black areas in iphones. we also have another speaker. the senior adviser for transnational homeland security and counterterrorism program at the center for strategic and international studies. that will be wednesday december 4. also at 8:00 a.m. to 9:00 a.m. and that also will be held at the university club which is on 16th street in the northwest. i also have a very special announcement. as many of you know the aba standing committee is the oldest standing committee in the american bar association. we actually just celebrated our 50th anniversary in 2012. it's a committee that was started by then aba president
lewis powell who then went on to have more of an extraordinary career with the supreme court. there was another major individual who is a force in setting up our committee and that was a man named lloyd. he is one of the founding fathers of the committee and was a force in national security law and the understanding of the rule of law and civil liberties. we have created an award and it's one of the most prestigious awards are committee can give out. as i look around the room i see friedman is in the audience and he was a recipient of the word but i have the great pleasure of announcing that this year's award winner is john norton borg and i'd like you to give a round of applause. [applause]
john has had an amazing career. he got a lot of applications for the award but i'm holding up his cd which runs 22 pages. small print. i'll give you the table of contents. 47 books, five accord views and apparently is spending so much time writing books he does not have time to read books he could see only has five look reviews. 88 articles monographs and book chapters 33 newspaper articles and letters 58 testimony statements including government testimony and statements. one arbitrary of decision and eight i'm published papers that soon may be published now that you are an award winner. he has had an extraordinary career of such dedication to the rule of law and national security. it's hard to think of someone who would be a more worthy carry on traditions and i can't thank you enough john for doing what
you have done for our committee and what you will continue to do for the rest of this panel and what you will continue to do for us as long as you still have rest and you so thank you so much. i also want to point out that today we are going to have a full day. john is going to be doing his panel with an extraordinarily extinct -- distinguished group of people who i think have the tradition of we stand tall and we swing hard and we call it as we see it. that's why so many people come to us because of our bipartisan approach. later in the day we will be having cybersecurity future challenges with mary derosa and it may well have a keynote address by jeff smith a partner and porter talking about the national security london will be ending with the applicable issues facing lawyers would tell harvey and we'll be having the honorable james baker from the u.s. court of appeals for the armed forces and dutch blakey who will be discussing ethics.
those of you have to stay for your ethics cle that will be coming on at 2:15 to 4:00. with that it's my distinct pleasure to pass the podium on to john who will running -- be running a panel for which we are looking forward to extensively and thank you again john. >> harvey thank you so much for the honor of perceiving the lehman award. i knew maury liebman very well, a recipient of the presidential medal of freedom and maury had just done extraordinary things for this country and for the rule of law and the world. so it is a very special pleasure for me and a the special honor to have an award named after this great american. we have a particularly important subject matter to discuss on the
first panel today. it is that of the nexus between transnational crime and terrorism and other issues in national security. this is an issue that i think is not really understood. there has not been the kind of focus on this as there has been in many other areas of national security law in recent years. and yet the magnitude of this problem is one that has been growing and is today a very serious issue. the director of national intelligence testified with the congress of the united states last year that the nexus between crime and terror was in fact one of five key threats to the united states national security today.
now there are many different parts of that nexus and i will leave it to our panel to really discuss that for you in depth, but part of it of course is the ability of groups that are using organized crime and using crime to raise money to finance a variety of terrorist activities and other national security threats including insurgency. in addition to that there is going to be a sharing of logistics. there is going to be a learning of tap tics from one group to another. we see particularly the nexus of this in terms of locations in areas for example of collapsed government and failed government or areas such as venezuela which have regimes that are in fact very difficult for the united
states in foreign policy. so there are many different interrelations here that unfortunately seem to be getting more serious by the day and we have a panel that i think is certainly one of the best panels one could possibly put together to talk about this. the real top experts in the united states on this subject. our first panelist is spike bowman who is a specialist in national security law and policy. most recently he served as the deputy of the national counterintelligence executive. he served before that is the senior research fellow at the national defense university and prior to that he was in the senior executive service federal bureau of investigation is the senior counsel for national security law and is director of the intelligence issues group at
the national security branch. please join me in welcoming spike bowman. [applause] >> thank you, john. when we think of organized crime i think most of us incorporated about the east coast of the united states when we look at the crime families and things like that and we tend not to really look at it as a national security issue. after all what disorganized crime do lex it's money and it takes money from people and takes money from organizations from institutions. it corrupts police and officials in the government at officials and engages in arms trafficking and so forth. the problem you have with looking at it as simply a criminal enterprise is that you can't have effective organized
crime if you don't have corruption somewhere along the line. in addition to that if you have anyplace in the world which is unstable you have a breeding ground for organized crime and if you think about it depending on how you count it there are 195 countries in the world a great majority of which are failed states which gets a lot of opportunity and breeding ground for organized crime. instability in any region is a threat to all of us. instability also allows organized crime to flourish in these areas and organized crime doesn't want the rule of law to be well protected or established in these areas. after all the rule of law is an enemy of organized crime. so this is one of the problems that we face.
now we started looking at organized crime as a national security issue rather tenuously quite some time ago. everyone in this room is familiar with executive order 12003 which was written in 1981 and when that order came out one of the things that the order established as a national security threat was international drug and international terrorism investigations. not for cicely organized crime but of course what are international drug organizations engaged in? international organized crime. as you move forward in time you begin to look at it a little more specifically as a national security issue. the presidential decision in 1995 clearly declared international crime a threat to national security and the same year 1995 the national security strategy recognized organized
crime as a national security issue. in 2002 the national security strategy again recognized it as the social security issue. the same in national security strategy in 2006 and then in 2009 and national intelligence estimate recognized it. by 2010 the national security council was heavily invested in transnational organized crime. so this is basically something that has been growing and evolving and it's something we need to look at as a national security threat terry at if we think of the traditional methods of organized crime we can begin to see that this is something that really does affect us on a transnational issue. for one thing trying to combat it and trying to combat any transnational threat is difficult because you start as lawyers thinking about how you manage transnational threats and
for us it is the rule of law. the rule of law requires courts and requires prosecution and requires witnesses. it requires evidence. it requires choice of law when you're talking about different borders. so that is a major issue. one other thing that has come up in a very short period of time and by that i mean about 20 years is the influx of cyberissues into organized crime. i don't want to take up the next panels discussions on cybersecurity but pink about this for a minute. since about the mid-1980s to about around 2000, we began to occupy -- all of us began to occupy or live our lives in cyberspace. probably there may be a few of
you out there that don't have a facebook account. but basically we began to live our lives in cyberspaccyberspac e and this is one of the things that organized crime is beginning to take significant advantage of. because it is easier and safer and cheaper to try to steal money electronically than it is to go rob a bank or set up a traditional fraud scheme organized crime has invested very heavily in cybercriminal activity. one of the consequences of that is we have seen an increasing number of organized crime groups form around the influx of cyberissues in our lives. if you think about it for a minute, you think about all the
things that you do in cyberspace that criminals can take advantage of. you buy things on the internet. all of us buy things on the internet in the year credit cards out there and those of you and probably everybody in this room as hot something from athens on. you go back to amazon and buy something new and amazon says do you want to use the same credit card as last time? they don't ask you for your credit card number. you select the one that you want them to use. when these organizations get hacked you tend to lose things. i used use the example of my daughter. i have a 25-year-old daughter who doesn't like to carry cash around and she uses a credit card or atm card for everything. a couple of years ago christmas she visited some friends of mine in honolulu and as she took off
we spend 25% of the world's research and development dollars. so we are the biggest target in the world for proprietary information, and we are we are losing billions of dollars each year in -- from pro -- proprietary thefts. they have gone actively to the area. and businesses are the only beginning just to try to cope with this. only a few years there when we go to businesses and say you're going to be -- here is what you need to do. they would say, well, i have to spend money to do that. my obligation is to give my dividends to the shareholders. or that have to go to the board of directors and ask permission to spend money for something that doesn't come to the bottom line. we're seeing that change a little bit today. you know, when olympics were
held in china a couple of years ago -- we didn't want them to take the blackberry and come back and plug it in to the system. we if get bill gates not to take the computer. linda took hers. [laughter] so anyway. i think that one of the things that what is the actual threat of organized crime to us today? and i think very clearly it has evolved in a short period of time to something that is more than just violence and racketeering, but something that becomes very personal to all of us. with that, i think i will stop here and let the next panelist speak. >> thank you very much. [applause]
our next panelist is thomas, who is president of international. a consulting firm based in washington. he previously served as assistant director of the federal bureau of investigations office of international operations from 2004 until his retirement in november 2008. his 29-year career in the fbi included 11 years as a member of the u.s. government senior executive service. he directed the office of international operations which included officers at fbi headquarter in washington, d.c., and 76 legal offices in us embassy and consulate worldwide. he served as a member of the executive committee of inter poll. >> thank you. i would like to --
i guess amplify what spike talked about in term of organized crime and basically the evolution of the u.s. efforts to combat it. both domestically here and working throughout the world with other organizations to try to stop it. much has been made over the years that organized crime and terrorist groups were going to form a partnership that would be devastating to the united states, developed countries, and developing countries. what we have seen over the years it's not exactly worked out that for several reasons. in the areas where they cooperated a great deal they have expertise in explosive i have, creating fax travel documents, accessing the global financial networking, committing violence -- white collar-type crime. all of those type of things to go against the government regulations in laws that exist in various countries.
frost groups do the same thing. where they differ is that the leaders of organized crime not trust jihadists. at all. the reason for that is they're in business to make money. they will use violence and the threat of violence and absolutely depend on public corruption from police, judges, legislator, they require corruption to exist and flourish, but they're in the business to make money. if you're in the business of using violence or committing crimes to sustain a political motive, a religious motive, other reasons than greed, they don't trust you. you don't think the way they think. they don't want to hear about it. in term of what spike mentioned about cyber. this part is true. one of the things we talked about -- i took over the fbi organized crime program in 1997 and ran it for five years until 2002. so i was running that during the transition what occurred after 9/11 in term of government
programs. and, you know, we saw many things. spike mentioned some of the legislative changes and decision directors that went out in the '90s. that part was true. when i took over in '97. it was right after the time period where in addition to international terrorism and international narcotics trafficking, organized crime was then deemed and labeled a threat to united states national security. therefore, the directive stated that in certain circumstances law enforcement and the intelligence community could cooperate. itthis was a huge difference given that with the creation of the intelligence community by the national security act of 1947, you had basically a wall go up. and during that era, this was the fear of not allow a cans top piece of equipment to be created
in the united states. a japanese-sometime secret police. the difference it created the cia among the other community agencies at the time and directed they would not work closely with the fbi to prevent the two from forming a partnership and becoming all powerful type. in other words if i'm running organized crime, i can say this gangster declare him a threat to national security and do every kind of meta data collection and other secret intelligence work that not be discovered later and help us in the criminal case. that have the barrier that went up. after 9/11 much was made about the culture agency. they don't like each other. they don't share information. that was nonsense to the public officials that said it over the years, were not aware of what they were talking about. spike and i formed partnership in the late '90s. after the directors had gone out and become law and presidential directors, nobody addressed a
fundamental, legal fact of our system. that is called the fourth amendment. when you are going prosecute someone for a criminal case in the united states, the defendant is entitled to know how you investigate. what was the predication of the information. why did you open it? what techniques did you use? if you used title iii authorized electronic surveillance, wiretapping, what was the basis of it? reveal the avid, motions are filed under discovery to reveal all of these facts and only a very limited minuscule amount of information basically the identity of a considerable informant that might have been used in an of a david can be withhold. otherwise the defendant is pretty much entitled to everything. the agency is pretty much required to open the book to the defense attorneys to allow the defendant to see. it the directives, including later the patriot act, did not, in my opinion, should not and
will never address the fact the defendant in the system has a right. when we started to try to develop the system to work together law enforcement and the intel community, we were trying to find out how exactly was it going to work? at the time running the organized crime program. i ran an operation of -- still a top ten fbi fugue fitch we were working together many aspect of it with the intelligence community. and spike and i attended probably 50 to 100 meetings at nsa headquarter at langly at fbi headquarter where all of the attorneys and all the leadership of the criminal programs and intel programs got together and trying to figure out under what circumstance could we work together? how could we share information and gain assistance from the intel community without cardiovascularring them and forming the secret alliance that was not required.
now, later the fbi indicted the organization dismanhattan th -- dismantled them. he was trying to perpetrate $150 million fraud on nasdaq. we prevented that. we did a great deal of good in the case. everything was going just wonderfully until -- it wasn't even the defense attorneys, it was doj attorneys going prosecute and oversee the prosecution and show up and say, hi, cia, open your books. we want to see what help you gave the fbi. sources and methods. well, their welcome was soon wornout when they did that. rightfully so. you have two competing interest in the system. a right of a defendant know what the government did to him or her and why. and how and when. on the other hand, the need for our intelligence agencies to protect the very sources and methods they need to ensure our
national security. of it not resolved completely in the late 'out. it was not resolved by the patriot act. i don't think fundamentally that part will be resolved. it's a very difficult issue. and fortunately for us, terrorist organizations and organized crime organizations throughout the world have not formed the allegiance that we thought they might. thankfully. and in term of cyber crimes, some of the groupser. traiting cyber crime they haven't the leader, the gangsters are old fashioned and autocratic, some cases just plain stupid when it comes to the potential use of the global financial market. stock market and other means other than violence. so that's the interesting thing about them. as long as they are stuck in the world of trying to resolve to the knuckle dragging, racketeering meths that are -- methods tried and true for the last 75 years in organized crime, that's a benefit for us.
as we used to say -- as i used to say when john goty and kevin get together, lookout. in other words a leading gangster or organized crime group -- if they team up with level-a hackers and use their ability to penetrate, computer networking, data base systems as spike mentioned when able to do that and commit extortion against the amazon and the banks and the security companies, we will really see the jeopardy to our system and our government and the economic engine that drives not just the u.s. but other companies. and if i could have one more difference that is important with the jihad. the jihady groups, in many cases, they want to overthrow the government and replace it with whatever system they believe in a fundamental system they want to install. organized crime doesn't want to go that.
the gangster in the country want the united -- they are patriotic. they want the u.s. to survive and stay well. it's the cash cow. if the cow dies, no more milk. they really want to just suck off and bleed off money from our system and other companies. where it hurts overseas particularly we have seen in eastern european countries after the fall of the soviet union. we see it in africa, asia, other part of the world. there are many countries that don't have the ability to absorb that kind of loss financially or the degree of penetration of corruption within the system. it jeopardizes their entire government system. we don't see that ability here. it took the fbi a long time, i will admit, to get off the bureaucratic rear end in the days. then starting in the late '60s, '70s, '80s. go after --
asian organized crime other groups from around the world african organized crime from getting the same foothold here that they were able to do all those years. so, you know, we were proud and fbi to be able to have such a role in dismantling and weakening will closet is a know stray and preventing the groups taking over. enabled in 2001 the redeployment of many resources to the counterterrorism program. i think i'll leave it at that. thank you very much. [applause] now we'll come to somewhat narrow geographic focus. we're going look at the experience of new york city. largest city in the united states. how is this an ex sis between transnational crime and security
issues affecting knox -- new york city. i'm delighted we're able to have with us douglas who was appointed the new york city police department deputy commissioner for legal matters in jafn 2013. he's a former law partner. cohead of new york litigation section. as, of course, deputy commissioner he also served for that as associate general counsel of time and before that as an assistant united states attorney from the southern district of new york. much of his crime fighting background comes from that role of assistant u.s. attorney. the period from 1990 to 1996. he prosecuted investigated a wide range of federal crimes including rico violation, narcotics trafficking, bank fraud, and mail and wire fraud.
he prosecuted a number of major russian organized crime cases. then at that time, of course, major international crime problem. those cases involve murder, extortion, drug trafficking, and other crimes in u.s., europe, and asia. he coordinated with european officials to extradite criminals. nothing stays limited in a particular geographic area. it is truly transnational crime and the interface with security problems. thank you. >> new york city may be geographically smaller. it's inherently international city to the bones. therefore all the international problems are our problem as well. let me suggest that the overlap on the nexus between organized crime and terrorist groups is not limited to two separate groups coming together but terrorist groups and others like them uses the means of organized
crime including just flat old fashioned criminal conduct. let me suggest that the phenomena presents a useful tool to law enforcement in an effort to disrupt in this dismantle some of the terror groups. and at the n.y.p.d. we are ideally situated to take advantage of that opportunity. we i think we are seen as a legendary law enforcement agency of the most traditional type. in addition to september 11th under mayor bloomberg and commissioner kelly, the police department developed an extraordinary intelligence capability. and the two can work hand and hand together. more so over recent years, as i said, we've made an effort to take advantage of our ability to investigate traditional criminal activity. we expend enormous effort to do our best to prevent any future terrorist attacks on our city. and a big part of that is
gathering intelligence but prosecuting where we can. including when the crimes are not specifically in terror crime. but other criminal conduct. i thought one way to talk about this was give a recent example and talk about a case which we indicted this year called the people versus ram dan. it's a state case. it was indicted of may of this year. basil ram dan was the main defendant. there were 15 others indicted with him. it's an enterprise corruption case. it was involving massive money-laundering charges. the case grew out of an investigation that was semi mundane. it was involving stole, goods in particular baby formula in upstate new york. it turned in to a year-long investigation involving hsi, n.y.p.d. and others using traditional. using traditional law
enforcement maineds of undercover, surveillance, court-authorized wiretap. it was, in the end, massive cigarette smuggling enterprise bringing untaxed cigarette from new york to virginia. done on a large scale. we think it netted over $50 million in illegal proceeds. during the take down $1.4 million in cash was taken out of the resident. another seizure of $200,000 of cash was made in new york city. the interesting thing -- the reason relevant to this discussion, some of our original suspects in the case had ties or connections to -- convicted of murdering a student name -- in 1994. he was in a school bus crossing the brooklyn bridge. i don't think people u
understood the significance of the event. it was in 1994 only after -- what was beginning to cook at that time. other original suspects in the case had ties to blindshake. one of the most significant terrorists to inhabit new york city. people close to the chic invested in the baby formula businesses. there were connections to top ho mas officials. we know that similar schemes are used to enrate sometimes massive amount of fund that can be used to support terrorist organizations. it's difficult to know where the money went. it's more difficult investigate
the events overseas particularly in unstable countrieses. so you a hard time finding with things go. one of the things we conclude sometimes you act before you are perfect information. you have an opportunity to disrupt a -- you take it. we indicted the case. i think the violent potential violate nature of the group was revealed in last month in october. the leader of the group one of the other defendants were indicted on conspiracy to commit murder charges. they were plotting to kill several people they thought were witnesses in the money-laundering case against them. so they have been indicted on those new charges. so, begun, i think it's an interesting example of the opportunity that can be present bid the criminal conduct again, sort of traditional criminal conduct. it is often used by people who either are or have ties to maybe related to terrorist
operations. [applause] >> thank you very much. prior to asiewmenting her teaching responsibility she was a judge in colombia. and when she came to the united states she served -- i'm delighted to say, as one from the university of virginia, as law clerk to the supreme court of virginia. she has an extraordinary background including works as an undercover agent. she's an external researcher in the strategic studies of the
united states army war college. she participated in rule of law, judicial reform, and hemispheric security projects sponsored by the u.s. department of justice, defense, state, and -- she's a person of enormous courage. and standing up for the rule of law in very difficult circumstances. >> thank you. [applause] how the organized crime in the americas is a threat to the united states national security. it's going to be difficult because i have only ten minutes. i will -- i'm going to generalize.
it's not because every country or every organized enterprise works and behalves the same way. it's just because i have to do it to be able to tell you what is going on in the region. and one of the things i want to emphasize as i mentioned some of the aspects that are going on in the americas is, yes, organized criement is about money. we are living in times of economic crisis. and the fact we are having an economic crisis needs to be something important for us as we hear what i'm going tell you. why? because what is going on in the region has encouraged us to invest money in helping the countries that are suffering the most amount of violence due to
organized crime presence. also because a lot of enterprise that the organized crime has today is competing with our corporations. so let me just give you a trek through the americas. organized crime in the americas is a threat to democracy. the economic and public stability of the region. the integrity of the institutions, and increases violence. and all of these has a direct security implications for the united states. eight nations, brazil, columbia, ban -- are among the 50 nations worldwide that spent the most
amount of money on combating violence. that's according to the 2014 global index. the region has a second largest number of internal displaced people in the world. in 2012, with aet total of $5.8 million it increased by 3% from the prior year. columbia remains the country with the highest number of ipd in the world. with a total of between 4.9 to $5 million. the year alone is an estimated 230,000 people flee their homes. that is not just because of internal arm conflict. it's because of lot what has
happened today with the internal arm conflict is triggered by the presence -- which are already cat logged as organized crime by the united states. about 160,000 displaced people in mexico since 2007. that's because of the drug violence. organized crime is very sophisticated fire power. lot tick america is a wash in legal weapons. i'm going give you example of illegal weapons you find in latin america. brazilian gains have class three weapons. and columbia there -- [inaudible]
they come back with weapons and money. the growing -- activity of organized crime takes advantage of weak and frag tile constitutions. it allowed organized crime to pen at a time the state institutions and benefits from the geostrategic position. organized crime have a very diverse portfolio. today i'm going give you the
diversification is not just the drug trafficking, laundering money, human trafficking, and smuggling is huge. weapons trafficking, document forgery, pirated good, illegal mining, illegal logging, illegal ranching. drug trafficking is flexible and in constant evolution. one of the things that seems to tell us that it's evolving is because? the united states the consumption of cocaine seems to diminished upon the other hand it increased in europe and africa. in the united states, we estimate that 90% of the illegal drugs that are entering the united states borders pass through central america and mexico. half of them come through central america. participation in hon honduras is
connected to human trafficking. the trafficking roots now run through brazil, going through europe, and -- africa. the suez canal is used to access the mediterranean. and most of these rely on maritime transportation. shipping containers are used to transport illegal drugs, and here we go with cyberattacks. to move drugs today, organized
crime is hacking shipping containers. it may sound like science fiction. this year the police in the netherlands seized one ton of cocaine, one ton of heroin in a suitcase with $1.3 million recovering a massive drug smuggling operation that broke in to the shipping companies. according to the prosecutors -- two containers terminals by using mall war attacks directed a authority workers and shipping companies.
we know -- [inaudible] moving on to another -- counterfeit goods. larger than the national gdp of 150 economies, according to the oecd. they give high profitability because they are more risk detection and relatively penalty for these. $200 billion of international trade has been pirated or counterfeit products. there's a study in brazil that show the connection between
pirated good and organized crime. nine out of ten in mexico are pirated. counterfeit pharmaceutical in columbia has 1,000% profit margin. and is more profitable now since the illegal drugs. lelt move to illegal ranching and logging. it's known as a [inaudible] for the legitimate economy. in guatemala, calf doirn, mention, and chinese gain are laundering money through ranching. they are cleaning vast areas of land and destroying the environment. they are selling cattle on the mexican side for profit. and of course, they are competing with a legal
companies. chinese gangs are also involved in illegal logging. and the wood is sent to asia. illegal logging is going on in columbia and brazil and also connected with organized crime. moving on to illegal mining. organized crime in colombia is -- operations in the country. including the unlicensed extraction of gold and other metal. gold is used to launder money through other illegal activities like drug trafficking. those are just a trip through some of the diversification of the -- [inaudible]
we also have found link between organized crime and organized crime from other regions. i'm just going mention a few. [inaudible] has been present in mexico, colombia, and seems to also be present in argentina. doing what? human trafficking. russian -- also human trafficking with chemicals for meth. the nigeria criminal gang control 30% of cocaine. it's a lot to be concerned about. i think that we need pause and think can't we compete with
organized crime? i think they are a huge national security threat to the united and a secured threat to the world. thank you. [applause] i'm going pose a few question to the panelist before we open it to up to the floor. i'm going start by noting that there was recently june 2013 a crs report for congress on terrorism and transnational crime foreign policy issues for congress. and country of the tendency to the document basically lists a variety of terrorist organizations around the world and links to criminal financing. some of these organizations,
it's very clear, are summerly being funded by the iranians and others and may be purely state sponsorship. many of them on the list going for page after page are, in fact, fund themselves in substantial part, at least, with criminal activities. my first question for the panel is what can be done in dealing with the problem of terrorism going after the funding and trying to cut off the criminal funding part of support for terrorism. as many of you know, the treasury department has had an outstanding program. one of the most effective things we do against terrorism that goes after the money of terrorist organizations. so the question is, what can we do that we're not doing that perhaps may be more effective or additional efforts to try to go
after the criminal funding operation of terrorist groups? let me open it up to any member of the panel that would like to respond to that. >> i'll take a shot. i think one idea, i was talking about earlier as seen an as opportunity if the conduct itself is criminal it with be an opportunity to disrupt the pattern by prosecuting investigating and prosecuting people. you can seize, money, of course, as well as criminally charged participates. it probably requires greater cooperation between agencies, which i gather, you know, is sort of the holy grail. i agree with tom it's not as bad as often portrayed. it's always an issue. i think there are opportunities even at the local level sometimes to actually investigate and prosecute people for the conduct. decide whether you can prove anything directly related to terrorism.
if you have reason to believe it's related it makes it that much more important a case to prosecute. to sustain themselves or obtain funding to operate. if you go back, i was in high school in the '60s but can remember the days of the liberation army conducting bank robbery and armored car robbery to sustain their terrorist objectives. in the mid '90s had the fbi an an enormous case based in charlotte, north carolina division involving the smuggling of cigarettes by hezbollah to obtain funding to basically create the international smuggling of contraband on taxed groat raise money and send to the middle east. it goes back to the thick of not wanting to kill the cash cow.
for decades the only the two bombings by hezbollah. but they never conducted any such operation in the u.s. because they didn't want to draught attention of law enforcement. it finally came through the cigarette smuggling case and a few other criminal cases in chicago. we had food stamp fraud and things like that being conducted by middle east organizations. and sending the money back to support hezbollah or hah mas or other groups. bank robbery, armor cared robbery, have been used for decades by terrorist organizations to fundraise. that is not the same as having a direct partnership with russian
organized crime or the south american cartels back in those days the other groups. the mexican cartels we see today are operating and undermining mexican and u.s. interests. that's an important distinction to keep in mind. criminal activity is a great source of money from john dill german philosophy on up to agree haddists. that's going continue. we cannot just look at one and overlook the other one. i think we need to also look at&t the enablers a little bit more careful. we need to look at accountants, brokers, bankers, lawyers. going after the money that
organized crime has alone is not going fix the problem. if they are flourishing it's because there's corruption. and i think it is really important that we -- with corruption. >> thank you very much. rete go to a second question nap is given the way in which this an ex sis crosses two community. the law enforcement community and the national security community, are we effectively organized to deal with the problem and the special issue of this an nexus. how should we be changing our organization nationally or internationally to be dealing with these issues? any thoughts from the panelists? we should not go to knee jerk reaction when a major disaster happens. back in the day of my
partnership here of trying to bridge that gap between intel and law enforcement work together. during the time, we had an organization at cia headquarter called the organized crime operations group. 85 people had about 15 at any given time 15 to 20 fbi we actually in the organized crime program with regard to human trafficking internationally did two renner dedication in the program for major international human smugglers working together. 9/11 happens. two month after 9/11 that no longer exists. it's gone. because we have to address counterterrorism. everybody do this. it's the top priority of the government. wait a minute. everything over here. we need keep at the policy maker
level. it requires advocacy at the law enforcement and intel community level to maintain a balanced approach to this. what was mentioned was exactly true. the focus on organized crime has to be everything from the bank robbery and cigarette smuggling to the public corruption requires is to a variety of other criminal activity. but we need to maintain a balance. because e thought criminal programs don't matter. you are find bank fraud. who needs that. many of the thicks that became too min call to get the attention of federal law enforcement proved later to be
critical to the fundraising activity of terrorist organizations or the fundamental fundraising for international organized crime groups. and so that would be my word of advice to policy makers and the hope they listen is really take a look. when you sacrifice one program for the sake of another, really stake a look -- yfs the program created and what benefit comes from it? with the law enforcement agents themselves. sometimes i think they operate in separate spheres. for good reason sometimes. if you want to get practical and be able to take law enforcement steps and make sure you're focused on the right people, the integration of those two efforts can be extraordinarily powerful.
as i said before robust intelligence effort. there a lot of in-house analysts. very brought -- bright young people who focus on intelligence analysis and integration of them with street wise detective is a potent combination. things like that and sounds like suggesting this sort of operation was prior to september 11th. it's a strong combination. i think people should look at that. we had an organization working pretty well. one of the things we sort of did in getting rid of it was recreated for in front of me -- tropical storm center. it's bigger and more robust than it was. the point of the matter.
if you put the resources together. they tend work. we already have direction from every president going back for years now to work together on organized crime. we don't have direction to put ourselves together in the way we did at one point. i think we need to reestablish that for organized crime. >> thank you. >> i agree with everything that has been said. among so many agencies that could be coming together to try to help and determine what is going on with organized crime. we need to try to use tech neeblg that will be preventive. we need to prevent instead of always reacting when it's too late.
could you tell us how effective the international level of cooperation is and what needs perhapses to be done there to enhance this? >> there are a number of multinational organizations, and probably interpoll is the largest and most relied upon by other countries. which covers basically everybody but iran and north korea. for the most part. the other federal agencies, custom, a couple of others have it. dea has it. the rest of the world can't afford it. some 50 countries have their police here in washington at their u.s. embassies here. but that may cover all of north
america. not just the fbi or dea or certain federal agencies. overseas they rely on it. interpoll has 190 member countries. and what it basically is a 247 communication networking to pass information among those countries and ensure cooperation in assistance in marshall resources should they need it. interpoll does not contrary to some of the movies you may have seen. it does not have a team of investigators with the natch run out and investigate crimes. but what they do is through the communication networking it's get countries one or more in a major situation to send the resources to another country that may be in need. that can be, you know, a wide variety of law enforcement or national interest such as the tsunami. get additional countries to send resources to asia countries that were victimized to help identify victims or in some cases try create task forces to assist in
trying to address the mali pirates which is affecting commerce in the indian ocean bordering country. or other issue like that. prior to -- ryan in the last year as general secretary he's a former -- at the time of when atf was under him. but he that i had to piggyback on the international air travel reservation system. it cost money to get on it. just like the travel agency sincerity. you pay by the minute. a country like --
they download the messages and upload the turn it off until next week. if you have internet access you can access the system. they don't pass classified information on it. you're not giving away the key to the kingdom. but enable the sudan of the world to basically be on their much longer. they may not have a 24/7 law enforcement. they may be only 9-5 but better than 15 minutes a week. it proved the two adults posing as parents were not their
biological. they had no clue as to her identity because she had been abducted as an infant. huge worldwide organized crime all the way through movies seen as sex trafficking organizes other businesses that use illegal aliens coming to the country. in this case they couldn't identify it. they put the messages out. all the details go over the networking. the girl has been identified. the country where shoves abducted from has been identified. they know the information. they do not know the identity specifically of her parents yet. but the investigation is ongoing with the other countries. it shows probably her mother
sold her when she was pregnant. sold her to an unorganized crime group that tasked her to greece. that's an example how it works. in the u.s. here, it is administrated by under the command of the deputy attorney general. the officers here in washington, national central bureau have about 120 full-time employees from 22 different agencies. we don't have a single national police agency contrary to what some fbi agents think. [laughter] but the 1900 member networking. thank you.
all the talk about the international nature of the problems. it's central part of the problem. and in light of september 11th and the threat of terror to the city, i think it's worth noting that the police department has 11 detectives stationed overseas who work closely with local law enforcement and the 11 countries in order to understand the conditions. in those cubs they may well directly impact new york city because the diverse nature of our population. that's -- that international part is a key part of our efforts. >> i had two last questions for the panel before opening it up to the audience. one of those is if we look now to substance --
change in the law and policy to enable us to do effectively deal with the neck us is. i'll make a point. it makes it difficult to prosecute terrorist cases in new york state and a lot of good statutes available in the federal system. and it's a minor point. but i guess the larger point it's used important to kind of exam the laws that are on the books and see what can be approved to help combat the
problem. >> thank you. i can add another point to that. that's an ongoing situation of -- stupid if i on the part of the government. that's sequestration. much was made about the government shut down and potential of not paying our bills and all of that. and the crisis has been averted for 90 days. the crisis isn't completely averted. i can give you an example. since last year the fbi had an hiring freeze of $750 million cut through u the budget. through attrition is downsizing by 3,000 positions. not a word about the publicly. we don't hear a word about the other federal agencies intel and law enforcement that are affected right now by sequestration and the inability of our policy makers and i'll blame congress and the white house and everybody included to allow sequestration to continue without a sthowghtful --
thoughtful process. there was a thoughtful process that went to the budgeting of the agency. it goes out the window when we take agencies and cut them. it's occurring right now. again whrab is the agency sacrifice? is if going to sacrifice the major counterterrorism cases? no, food stamps, cigarette traffic? yes. that needs to be brought to an end. >> tom, thank you very much. a fundamental point to be made to us. let me shift the last question. that is simply the counter part to the last question. has the issue ever been taken to the security counsel of the
united nations? it's one of the possibilities. if we took it to the security counsel what is the level of cooperation that might be improved? .. >> we've had experiments, and tom can address it better than i, but, for example, in hungary, we had fbi agents there working with the police to shut down organized crime in hungry which
was remarkably successful. there are a number of things we could do on an international scale that we do here in the united states like as we started exchanging hostages and different agencies, but we could work more closely, and we could also have, try to institute a better way of international investigations, not just communications of interpoll, but europol has gone a long way in international investigations within the european community, so -- >> other comments, tom? >> if i could add one more thing to that relating to sequesteration. headquarters and discussions on the hill over the last six months has been the tremendous expense of having the fbi in 76 offices overseas, including, i had agents assigned at